Berlin, Munich, Frankfurt. The German-French tank manufacturer KNDS is expected to become a state-owned company. The original plan for an IPO is no longer being pursued. Instead, the German owners want to sell their shares to the federal government.
Handelsblatt learned this from several people familiar with the negotiations. Accordingly, there should be a final decision in the next few weeks. What is still being negotiated is the price.
KNDS was created in 2015 from the merger of the French state-owned company Nexter and the German company Krauss-Maffei Wegmann (KMW). The company plays a crucial role in Germany's defense capability. Among other things, it builds the German Leopard 2 main battle tank and its French counterpart Leclerc.
So far, the German Braunbehrens and Bode families have held half of KNDS through the Wegmann Holding, and the other half belongs to the French state. Because the German owning families want to sell their shares, work has been underway to reorganize the group for some time.
The original plan was for the German state to buy 40 percent of the company, France to reduce its share to 40 percent and the remaining 20 percent to go public. This should have happened at the beginning of July.
However, the IPO was postponed several times, but KNDS still wanted to hold on to it until the end. But now it is clear: those involved are abandoning this plan. KNDS declined to comment when asked. There is also no comment on an imminent federal government involvement in the Wegmann family holding company.
The background for the failed stock exchange plans is the difficult market environment for defense stocks. The owner families therefore currently see no chance of raising at least 15 billion euros from the IPO, as had recently been hoped. At most half is currently considered realistic. The owners had originally hoped for even higher returns.
One reason for the clouded stock market outlook is that the drone war in Ukraine has raised doubts about the future viability of heavy weapon systems such as battle tanks. Rheinmetall shares have lost around 50 percent of their value since the beginning of the year.
CEO Jean-Paul Alary emphasized at the beginning of October that his company was sticking to its stock market plans. “The IPO is suspended for the time being, but not canceled,” said Alary in an interview with the Handelsblatt and the French newspaper “Les Echos”.
The board of directors made this decision at the end of June due to market conditions. "The valuation currently achievable does not yet meet shareholders' expectations. Of course, that does not stop us from talking to investors."
At the same time, negotiations with the Federal Ministry of Economics continued. Katherina Reiche's (CDU) department, like the Chancellery, was originally skeptical about taking over a large share of KNDS, while Defense Minister Boris Pistorius pushed for greater state influence.
Given the lack of alternatives, the federal government believes it makes sense to take over the entire 50 percent of KNDS shares, it is said. A remaining minority of families would achieve little. The involvement of an industrial partner was also examined, but rejected due to a lack of sensible options.
No contracts have yet been signed for the sale of the 50 percent to the German state; the final decision by the owner families is still pending and will largely depend on the price negotiations. According to insider circles, they are confident that an agreement will be reached.
The decision rests with the shareholders, said a spokeswoman for the Ministry of Economic Affairs. The federal government does not comment on hypothetical scenarios.
The background to the planned state takeover is that Berlin wants to prevent French dominance in the tank manufacturer. The Bundeswehr is KNDS's largest customer. If the family were to sell their shares elsewhere and Germany no longer had any influence, that could make rearmament in this country much more difficult.
The federal government now wants to secure direct access to the company and not leave it solely to the French state, also in view of the presidential elections next year, it is said in financial circles. If the federal government wants to secure influence, “the German state must take action now”.
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This orientation was primarily driven by former Airbus boss Thomas “Tom” Enders, who has been chairman of the board of directors of KNDS since November 2025. There is concern that under Enders, German interests could also be sold out in the tank manufacturer.
KNDS is of central importance for the rearmament of the Bundeswehr because the company not only builds the Leopard 2, but also - partly together with Rheinmetall - the Puma infantry fighting vehicle, the Boxer armored personnel carrier, the PzH 2000 and RCH 155 howitzers and the Mars rocket artillery system.
Through state participation, the federal government hopes to have more influence on business decisions and, if necessary, preferential treatment in deliveries. So far, the German state has a stake in Airbus and the sensor specialist Hensoldt in the armaments sector.
With the federal government taking over a 50 percent share, there could be renewed movement in the negotiations regarding the sale of the Mercedes-Benz plant in Ludwigsfelde to KNDS. The tank builder wanted to use at least part of the production capacity of the van factory near Berlin. However, KNDS is making the deal dependent on a large order of armored vehicles worth billions from the Bundeswehr, which is still outstanding.
